Our Backyard: Say Yes to Housing

Alameda should settle two costly lawsuits with a developer that wants to construct 182 units of housing on the estuary.

By Robert Gammon

Published: January 11, 2017

Illustration courtesy of Boatworks

In late September, the Alameda City Attorney’s office and the City Council made a serious error when they decided to keep fighting two lawsuits filed by Boatworks—a developer that wants to build a 182-unit housing project along the estuary—rather than settle the cases. At the time, the two judges overseeing the lawsuits had strongly indicated that they planned to side with Boatworks—and against the city. Boatworks had also signaled that it was interested in settling, as long as the city would let it build its housing project. One of the lawsuits was of particular concern for Alamedans because it threatened to cost the city up to $36 million.

Yet the city attorney and the council repeatedly showed no interest in settling the cases, and instead convinced themselves that they would win both suits (see November, “A Costly Fight Over Housing”). They were wrong. The two judges in the cases both subsequently ruled in favor of Boatworks. And as a result, the city is now facing a potentially huge financial shortfall.

But it’s not too late. The city could still settle the lawsuits before the court rulings become final. One of the judge’s decisions is scheduled to be finalized in January. Yet it appears as if the city is going to keep fighting Boatworks, despite the potentially dire fiscal consequences. The city’s stubbornness is particularly bewildering considering the region’s extreme housing shortage and the fact that the city essentially approved Boatworks’ housing project a half-decade ago.

A quick refresher on the Boatworks’ lawsuits: Earlier this year, the Emeryville developer sued Alameda when the city’s planning board mandated that the percentage of affordable units in the housing project increase from 15 percent to 20 percent. Boatworks, which plans to build the development on a 9.4-acre, weed-strewn vacant lot it owns near the Park Street Bridge, argued that the Planning Board’s decision violated a 2010 agreement between the city and Boatworks. On Nov. 3, Alameda Superior Court Judge Kimberly Colwell sided with Boatworks and set aside the planning board’s decision.

Boatworks also sued the city in 2014 after the council voted to raise developer impact fees by 300 percent. The fee hike relied on a so-called Nexus Study that was commissioned by the city and concluded that Alameda needed about $36 million to buy roughly 20 acres of new land and turn it into parks to accommodate new residents to the island. Boatworks contended that the Nexus Study was flawed because it failed to account for the fact that Alameda is receiving lots of free parkland from the Navy at Alameda Point.

On Dec. 1, Judge Frank Roesch agreed with Boatworks and ruled that Alameda’s new higher impact fees violate state law. Roesch noted that Alameda’s own lawyers admitted in court that the city had no intention of using the increased impact fees to buy parkland but rather planned to use the money to turn land it already owns into parks. Roesch called that an illegal bait and switch under state law. “[T]he calculation of the DIF fee based on the purchase of approximately 20 acres of land that do not, in fact, need to be purchased, is a violation of the [California] Mitigation Fee Act,” Roesch wrote.

Roesch’s ruling not only invalidates Alameda’s impact fee, but it threatens to delay the opening of Jean Sweeney Open Space Park, because the city was counting on fee revenue to help create the park.

After Alameda Magazine reported the court rulings on its website, Alameda City Attorney Janet Kern attempted to greatly downplay the importance of the decisions, portraying them as inconsequential in a press release. But in an interview, Kern acknowledged that she strongly disagrees with the judges’ decisions. In fact, she said the city plans to appeal Colwell’s ruling. And she said that once Roesch’s ruling is finalized, the city will decide to whether appeal it or redo its Nexus Study.

But there’s a third way: Settle the cases with Boatworks before Roesch’s ruling becomes final. Why? Settling means the city won’t lose out on $36 million in impact fees, because the fees can’t be challenged again by another developer due to the fact that the statute of limitations has run out. Redoing the Nexus Study resets the clock and makes the fees vulnerable to another lawsuit.

Settling also means Alameda will finally get the 182 units of much-needed housing it agreed to years ago.

Our Backyard is an occasional column by senior editor Robert Gammon.

Published online on Jan. 11, 2017 at 8:00 a.m.

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